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Organizations strive to be innovative and creative. For that reason, they invest in diversity management, because innovation and creativity can be increased through diversity. This means that the more different perspectives, opinions, and experiences are considered in a work process, the more innovative and creative work results can become.

However, intercultural tensions within the organization prevent firms to benefit from diversity in this manner. A new Harvard Business School study has shown that cultural disharmony decreases innovation and creativity. This means that, in an atmosphere of intercultural tensions, intercultural diversity brings about less innovative and creative work results than in a non-diverse setting. The study further highlights that the indirect effects of cultural disharmony are even more damaging than the direct effects. This again means that individuals and teams directly involved in a situation of intercultural conflict can deal with this conflict, usually remaining as innovative and creative. Those, however, who experience intercultural tension indirectly, by hearing and being told about it, or by observing it in other areas of the organization, become less innovative and creative.

The greater impact of an indirect involvement in intercultural conflict can be explained as follows: individuals and teams with direct involvement have direct information about the sources of conflict, and usually tend to blame one or more individuals for the conflict, rather than the intercultural difference prevalent in the situation. On the other hand, when individuals or teams only observe intercultural tension and conflict, they are likely to blame the intercultural differences for the disharmony, rather than individual behavior. As a result, they form negative views of intercultural difference in general, believing that cultures are generally not compatible. As a result, having less confidence in the benefit of intercultural diversity, they tend to use diversity to a lesser extent during the work process, resulting in a lower degree of innovation and creativity.

To counter this effect of the indirect effects of intercultural conflict, organizations need not only manage the diversity of teams or the intercultural sensitivity of individuals. The diversity culture of the organization in general needs to be managed, so that an atmosphere of cultural harmony becomes prevalent in the organization. Such a cultural harmony within the organizational setting is even more important than cultural harmony between individuals and teams. Individuals and teams have been shown to deal with cultural tensions in a way that does not affect innovation and creativity. When encountering cultural tensions indirectly, however, innovation and creativity indeed decreases. These results should encourage organizations to not only focus on individual and team skills when it comes to diversity management. Rather, organizations need to have an organizational understanding of cultural harmony. Thus, intercultural tensions very well can exist on the individual and team level. These individual and team tensions, however, need to be embedded within such a strong organizational understanding of cultural harmony.

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